December 15, 1995
The Honorable Pete P. Gallego
Chair
Committee on General Investigating
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910
Letter Opinion No. 95-085
Re: Whether the term “qualified hotel
project,” as defined by House Bill 2282,
Act of May 11, 1993, 73d Leg., R.S., ch.
231, 1993 Tex. Gen. Laws 480, includes a
private entity selected by a munici-
pality (RQ-854)
Dear Representative Gallego:
You ask, in essence, whether the term “qualified hotel project,” as defined by
House Bill 2282, passed by the Seventy-third Legislature in 1993, includes a private
entity selected by a municipality. Pursuant to House Bill 2282, a “qualified hotel
project” is eligible to receive rebates of certain tax proceeds.
The Seventy-third Legislature enacted the language in House Bill 2282 defining
the term “qualified hotel project” as an amendment to the Texas Enterprise Zone Act,
V.T.C.S. article 5190.7. Section 6 of House Bill 2282 added section 3(a)(14) to the act
to provide as follows:
“Qualified hotel project” means a hotel proposed to be
constructed by a municipality or a nonprofit municipally sponsored
local government corporation created pursuant to the Texas
Transportation Corporation Act (Article 1528l, Vernon’s Texas
Civil Statutes) that is within 1,000 feet of a convention center
owned by a municipality having a population of 1,500,000 or more,
including all facilities ancillary thereto such as shops and parking
facilities. [Emphasis added.]
Section 6 also added section 3(a)(15) to the Enterprise Zone Act defining the term
“eligible taxable proceeds” as follows:
“Eligible taxable proceeds” means taxable proceeds generated,
paid, or collected by a qualified hotel project or a business at a
qualified hotel project, including hotel occupancy taxes, ad valorem
taxes, sales and use taxes, and mixed beverage taxes.
In the same session that the legislature enacted House Bill 2822, it repealed article
5190.7 and codified the article in chapter 2303 of the Government Code. See Act of May
4, 1993, 73d Leg., R.S., ch. 268, §§ 1, 46, 1993 Tex. Gen. Laws 583, 883-97, 986. The
codification was a nonsubstantive revision; the legislature intended no substantive change
in the law. Id. § 47, 1993 Tex. Gen. Laws 583, 986-87. In 1995 the Seventy-fourth
Legislature incorporated the definition of “qualified hotel project” into subsection (8) of
section 2303.003 of the Government Code in order to conform newly codified chapter
2303 with House Bill 2282. See Act of Apr. 25, 1995, 74th Leg., R.S., ch. 76, § 5.50,
1995 Tex. Sess. Law Serv. 458, 505. The definition of “eligible taxable proceeds” has
been incorporated in section 2303.5055(e) of the Government Code. See id. § 5.53, 1995
Tex. Sess. Law Serv. 458, 510. All references in this opinion are to the Enterprise Zone
Act prior to codification.
Your query requires us to consider whether the phrase “hotel proposed to be
constructed by a municipality or a nonprofit municipally sponsored local government
corporation” in the definition of “qualified hotel project” refers only to a hotel owned by
a municipality or a municipally sponsored corporation, or whether it also refers to a hotel
owned by a private entity. Briefs submitted to this office suggest two differing
constructions of the phrase. One brief suggests that the phrase “proposed to be
constructed by a municipality” does not require municipal ownership but rather is
intended to distinguish hotels that the municipality has selected for tax rebates (regardless
of their ownership) from other hotels that might be built within the designated
convention center area. The other brief suggests that the phrase is merely a temporal
reference, denoting a hotel that a municipality or municipally sponsored corporation
proposes to construct and thus will own at some future time. In order to answer your
query, we must look at the definition of the term “qualified hotel project” in the context
of House Bill 2282 as a whole.
In addition to defining the terms “qualified hotel project” and “eligible tax
proceeds,” House Bill 2282 amends other sections of the Enterprise Zone Act, another
civil statute, and the Tax Code to delineate the authority of a municipality with respect to
a qualified hotel project and to establish the tax benefits to which a qualified hotel project
is entitled. The first four sections of the bill clearly refer to a hotel that is publicly
owned. Section 4 of House Bill 2282 amends section 2(a) of article 1269j-4.1 to provide
that a city is authorized to “establish, acquire, lease as a lessee or lessor, purchase,
construct, improve, enlarge, equip, repair, operate or maintain . . . improvements”
including “hotels owned by a municipality or a nonprofit municipally sponsored local
government corporation created pursuant to the Texas Transportation Corporation
Act . . . within 1,000 feet of a convention center owned by a municipality with a
population of 1,500,000 or more.” Act of May 11, 1993, 73d Leg., R.S., ch. 231, § 4,
1993 Tex. Gen. Laws 480, 481 (emphasis added).
Sections 1, 2, and 3 of House Bill 2282 amend provisions of the Tax Code
relating to municipal and county hotel occupancy taxes. See Tax Code §§ 351.001(2),
.102(a), 352.101(a). Section 1 amends the definition of “convention center facilities”
and “convention center complex” in section 351.001 of the Tax Code to include “hotels
owned by the municipality or a nonprofit municipally sponsored local government
corporation created pursuant to the Texas Transportation Corporation Act . . . within
1,000 feet of a convention center owned by a municipality with a population of
1,500,000 or more.” Act of May 11, 1993, 73d Leg., R.S., ch. 231, § 1, 1993 Tex. Gen.
Laws 480, 480 (emphasis added). Section 351.101 of the Tax Code authorizes cities to
use revenue generated from municipal hotel occupancy taxes to construct and operate
“convention center facilities.” Section 2, which amends section 352.101(a)(1) of the Tax
Code, provides that county hotel occupancy tax revenue may be used to construct and
operate “hotels owned by a municipality or a nonprofit municipally sponsored local
government corporation created pursuant to the Texas Transportation Corporation
Act . . . within 1,000 feet of a convention center owned by a municipality with a
population of 1,500,000 or more.” Id. § 2, 1993 Tex. Gen. Laws 480, 480-81 (emphasis
added). The result of these provisions is to authorize cities and counties to use revenues
from municipal and county hotel occupancy taxes to construct and operate a convention
center hotel that is owned by a municipality or a municipally sponsored corporation. In
addition, section 3 of House Bill 2282 amends section 351.102(a) of the Tax Code to
provide that a municipality may pledge the revenue derived from a municipal hotel
occupancy tax collected at the hotel for the payment of bonds or other obligations of a
municipally sponsored corporation that were issued to pay the cost of “the acquisition
and construction of a convention center hotel.” Id. § 3, 1993 Tex. Gen. Laws 480, 481.
Unlike the foregoing sections, the remaining sections of the bill, sections 5
through 10, do not refer to a hotel owned by the municipality or a municipally sponsored
corporation but rather to the owner of a qualified hotel project. Like section 6, sections
5, 7, and 8 amend the Enterprise Zone Act. Section 5 amends the definition of the term
“qualified business” in the Enterprise Zone Act to include an entity that “is a qualified
hotel project that is owned by a municipality with a population of 1,500,000 or more or a
nonprofit municipally sponsored local government corporation created pursuant to the
Texas Transportation Corporation Act.” Id. § 5, 1993 Tex. Gen. Laws 480, 481-82
(emphasis added). Section 7 amends section 13 of the Enterprise Zone Act. Prior to this
amendment, sections 12 and 13 of the Enterprise Zone Act permitted cities and counties
to refund local sales and use taxes paid by a qualified business or to reduce or eliminate
any fees or taxes, other than sales and use or property taxes, imposed on a qualified
business. Section 7 of House Bill 2822 provides in pertinent part as follows:
(b) A municipality, county, political subdivision, or other
governmental body may enter into an agreement to rebate, refund,
or pay eligible taxable proceeds to the owner of the qualified hotel
project at which such eligible taxable proceeds were generated or
collected for a period not to exceed 10 years. A municipality with a
population of 1,500,000 or more may enter into an agreement to
guarantee from hotel occupancy taxes the bonds or other obligations
of a municipally sponsored local government corporation created
pursuant to the Texas Transportation Corporation Act . . . that were
issued or incurred to pay the cost of constructing, remodeling, or
rehabilitating a qualified hotel project.
Id. § 7, 1993 Tex. Gen. Laws 480, 482 (emphasis added). Sections 9 and 10 of House
Bill 2282 amend section 151.429 of the Tax Code, which had provided only limited
refunds of state sales and use taxes paid by enterprise projects, to provide that “the owner
of a qualified hotel project” shall receive a rebate of 100 percent of the state sales and use
taxes and state hotel occupancy taxes paid or collected by the qualified hotel project for a
specified period. Thus, unlike other qualified businesses in an enterprise zone, a
qualified hotel project is eligible to enter into agreements for tax rebates with any and all
local taxing authorities and is entitled to receive a 100 percent rebate of site-generated
state sales and use taxes and state hotel occupancy taxes.
In order to interpret the meaning of the definition of “qualified hotel project” in
section 6 of H.B. 2282, we look not just to the language of section 6 but rather to H.B.
2282 as a whole. See Morrison v. Chan, 699 S.W.2d 205, 208 (Tex. 1985) (“[I]t is our
duty to construe statutes as written, and, if possible, ascertain the Legislature’s intent
from the language of the act. To ascertain legislative intent, we must look to the statute
as a whole and not to its isolated provisions.”) (citation omitted). Based upon our review
of House Bill 2282 as a whole, we are persuaded that the phrase “hotel proposed to be
constructed by a municipality or a nonprofit municipally sponsored local government
corporation” in section 6 may include a privately owned hotel.
First, the legislature used the words “proposed to be constructed” rather than
“owned” or “proposed to be constructed and owned.” We believe that if the legislature
had intended to limit the term “qualified hotel project” to a publicly owned hotel it would
have used the term “hotel owned by a municipality or a nonprofit municipally sponsored
local government corporation” as it did repeatedly in sections 1 through 4 of House Bill
2282. The rules of statutory construction do not permit us to add words to a statute
unless it is absolutely necessary to do so to give effect to clear legislative intent. Hunter
v. Fort Worth Capital Corp., 620 S.W.2d 547, 552 (Tex. 1981) (“Only when it is
necessary to give effect to the clear legislative intent can we insert additional words into
a statutory provision.”) (citing Mauzy v. Legislative Redistricting Bd., 471 S.W.2d 570,
572 (Tex. 1971)); Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 540 (Tex. 1981)
(“[E]very word excluded from a statute must also be presumed to have been excluded for
a purpose. Only when it is necessary to give effect to the clear legislative intent can we
insert additional words or requirements into a statutory provision.”) (citing Mauzy, 471
S.W.2d at 572). Given that House Bill 2822 does not manifest such clear legislative
intent, we believe it would be inappropriate for this office to insert the words “and
owned” into the definition of a qualified hotel project.
Second, in construing a statute, this office, like a court, must give effect to all
words of a statute and may not treat any statutory language as surplusage if possible.
Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex. 1987) (citing Perkins v. State, 367
S.W.2d 140 (Tex. 1963)); see also Cameron, 618 S.W.2d at 540 (“It is a rule of statutory
construction that every word of a statute must be presumed to have been used for a
purpose.”). Sections 1 and 2 of the bill authorize cities and counties to spend their hotel
occupancy tax revenues to construct and operate a hotel owned by a municipality or a
municipally sponsored corporation. If only a municipality or a municipally sponsored
corporation may own a qualified hotel project, then inclusion of “hotel occupancy taxes”
in the term “eligible taxable proceeds” in sections 6 and 7 of House Bill 2282 regarding
tax rebates would have no purpose given the authority bestowed on cities and counties to
spend their hotel occupancy tax revenues to construct and operate a hotel owned by a
municipality or a municipally sponsored corporation in sections 1 and 2. It would be
inappropriate for this office to construe the definition of the term “qualified hotel
project” so as to render this statutory language meaningless. See id.
Third, as a more general matter, we believe it is significant that the legislature
chose to enact the tax rebate provisions as part of the Enterprise Zone Act. The primary
purpose of the Enterprise Zone Act is to encourage the expansion of the private sector
within depressed urban and rural areas. See V.T.C.S. art. 5190.7, § 2(a) (repealed 1993).
The legislative findings of the act provide in pertinent part:
(b) It is therefore the public policy of this state to provide the
people of this state with the necessary means to assist communities,
their residents, and the private sector to create the proper economic
and social environment to induce the investment of private resources
in productive business enterprises located in severely distressed
areas . . . . In achieving this objective, through this Act the state
seeks to provide appropriate investments, tax benefits, and
regulatory relief to encourage the business community to commit its
financial participation . . . .
(c) It is the purpose of this Act to establish a process that
clearly identifies those distressed areas and provides incentives by
both state and local government to induce private investment in
those areas by means of the removal of unnecessary governmental
regulatory barriers to economic growth and the provision of tax
incentives and economic development program benefits.
Id. § 2(b), (c) (emphasis added). We believe that if the legislature had intended for only
municipal or municipally sponsored corporations to be entitled to tax rebates, it would
have chosen a different statutory vehicle for sections 5 through 8 of House Bill 2282.
Furthermore, we believe that these provisions must be interpreted in keeping with the
purposes of the Enterprise Zone Act which they amend.
The argument has been made that the legislature employed the phrase “proposed
to be constructed by a municipality” in section 6 of House Bill 2282 because of the
nature of the designation process set forth in the Enterprise Zone Act, i.e., that a project
must be approved by state and local authorities before it is awarded Enterprise Zone Act
incentives and is constructed. Under this view, the use of the phrase “proposed to be
constructed by a municipality” recognizes the fact that the majority of Enterprise Zone
Act provisions deal with activities occurring before construction of a project has
commenced. This argument, however, ignores the fact that House Bill 2282 provides in
section 6 that a qualified hotel project is entitled to automatic approval as an enterprise
project:
A qualified hotel project shall be deemed to have met the
employment, income, and other criteria of a qualified business and
an enterprise project, and the enterprise zone in which the qualified
hotel is located shall be deemed to have met all qualifications of this
Act to permit the [Texas Department of Commerce] to designate the
qualified hotel project as an enterprise project.
Act of May 11, 1993, 73d Leg., R.S., ch. 231, § 6, 1995 Tex. Gen. Laws 480, 482.
It also has been argued that the legislature could not have intended to include a
privately owned hotel within the term “qualified hotel project” because, unlike a
municipally owned or sponsored hotel, such a hotel would not be entitled to use general,
non-site-specific municipal and county hotel occupancy tax revenues to finance,
construct, and operate the hotel as provided in sections 1 through 3 of the bill. We do not
find this argument persuasive, however, because it is entirely reasonable to suppose that
the legislature intended to give a municipality the choice between public and private
ownership alternatives. While a privately owned hotel may not be entitled to use general,
non-site-specific municipal and county hotel occupancy tax revenues, it is entitled to a
rebate of state hotel occupancy taxes and state sales and use taxes generated on site and is
also eligible to negotiate tax rebates for other tax proceeds generated on site with local
taxing entities, including the county and city. Furthermore, we fail to see how it follows
that the affirmative grant of authority to a city to own and operate a convention center
hotel and to use hotel occupancy tax revenues to do so in sections 1 through 4 of the bill
precludes a private party from owning and operating such a hotel. For example, we have
been asked why the legislature would amend article 1269j-4.1 to permit a city to own a
hotel if the legislature intended such hotels to be privately owned. Again, we believe that
this amendment and the amendments to chapters 351 and 352 of the Tax Code are
entirely consistent with the conclusion that House Bill 2282 is intended to give a city the
flexibility to choose between private and public ownership of a convention center hotel.
For these reasons, we believe that the phrase “proposed to be constructed by a
municipality” in section 6 of House Bill 2282 is not intended to require municipal
ownership of a qualified hotel project but rather is intended to distinguish between hotels
that the municipality has selected to be eligible for tax rebates (regardless of the type of
ownership) from other hotels that might be built within the designated convention center
area. The result is to authorize local taxing jurisdictions to negotiate tax rebate
agreements as provided by the Enterprise Zone Act with only those convention center
hotel projects, whether private or public, selected by the city, and to entitle only those
hotels selected by the city to receive a 100 percent rebate of state sales and use taxes and
state hotel occupancy taxes.
Based upon our review of House Bill 2282 as a whole, we believe that the
definition of “qualified hotel project” includes a privately owned hotel. To conclude
otherwise would render significant provisions in the bill meaningless. We also
emphasize that because House Bill 2282 applies only to a hotel proposed to be
constructed by a municipality or a municipally sponsored corporation that is within 1,000
feet of a convention center owned by a municipality having a population of 1,500,000 or
more this opinion is of very limited application. Moreover, the effect of this opinion is to
give such a municipality the flexibility to choose between public and private ownership
arrangements; the opinion merely construes House Bill 2282 and does not endorse one
type of ownership arrangement over another.
S U M M A R Y
The term “qualified hotel project,” as defined by House Bill
2282, Act of May 11, 1993, 73d Leg., R.S., ch. 231, 1993 Tex. Gen.
Laws 480, includes a private entity selected by a municipality.
Yours very truly,
Mary R. Crouter
Assistant Attorney General
Act of May 11, 1993, 73d Leg., R.S., ch. 231, 1993 Tex. Gen. Laws 480.
Your query also asks about a private-public ownership arrangement. Because we believe our
answer to the above question resolves that issue, we do not address it specifically.
Subsection (8) provides as follows:
“Qualified hotel project” means a hotel proposed to be constructed by a
municipality or a nonprofit municipally sponsored local government corporation
created under the Texas Transportation Corporation Act (Article 1528l, Vernon’s
Texas Civil Statutes) that is within 1,000 feet of a convention center owned by a
municipality having a population of 1,500,000 or more, including shops, parking
facilities, and any other facilities ancillary to the hotel.
Although worded slightly differently, the codification of the definition of “qualified hotel project” in
section 2303.003(8) of the Government Code is identical in meaning to the original statutory language.
See Act of May 4, 1993, 73d Leg., R.S., ch. 268, § 47, 1993 Tex. Gen. Laws 583, 986-87.
Given that it is possible to construe House Bill 2282 based on its statutory language, we believe
that it is unnecessary to resort to the extrinsic legislative history of House Bill 2282 as an aid to statutory
construction. See Minton v. Frank, 545 S.W.2d 442, 445 (Tex. 1976) (“Where the intent is apparent from
the words of the statute, it is not necessary for this Court to make any analysis of the extrinsic evidence of
legislative intent.”); see also Boykin v. State, 818 S.W.2d 782, 785 (Tex. Crim. App. 1991) (“We focus
on the literal text . . . because the text is the only definitive evidence of what the legislators . . . had in
mind when the statute was enacted into law. There really is no other certain method for determining the
collective legislative intent or purpose at some point in the past, even assuming a single intent or purpose
was dominant at the time of enactment.”).
We also note that we have been invited to consider postenactment statements regarding the
intent of House Bill 2282 made by individuals, a legislator and an attorney, involved in its passage. We
decline to do so. See Attorney General Opinions DM-321 (1995) at 1-2 n.1 (“Post-enactment statements
of legislators do not form part of the legislative history of provisions that may be taken account of in their
construction.”) (citing 2A NORMAN J. SINGER, STATUTES AND STATUTORY CONSTRUCTION § 48.16 (5th ed.
1992)), JM-1256 (1990) at 7-8 (same); see also General Chem. Corp. v. De La Lastra, 852 S.W.2d 916,
923 (Tex.) (“[T]he intent of an individual legislator, even a statute’s principal author, is not legislative
history controlling the construction to be given a statute.”), cert. denied, 114 S. Ct. 490 (1993); City of El
Paso v. Madero Dev. and Constr. Co., 803 S.W.2d 396, 401 (Tex. App.--El Paso 1991, no writ), cert.
denied, 502 U.S. 1073 (1992); Mayhew v. Town of Sunnyvale, 774 S.W.2d 284, 298-99 (Tex. App.--
Dallas 1989, no writ), cert. denied, 498 U.S. 1087 (1991).
(footnote continued)
The Honorable Pete P. Gallego - Page 7 (LO95-085)
The Honorable Pete P. Gallego - Page 8 (LO95-085)